6. Startup Pricing 101

YC Partner Kevin Hale goes over the fundamentals of pricing and monetization, how it affects your customer acquisition strategy, and how to optimize it through a few rules of thumb.

tldr; Pricing is THE MOST IMPT aspect of Sales (biggest bang for your buck)— understand the variables well and you will do well; Go after early adopters in the beginning (they care more about benefits than price!); your price determines your acquisition strategy

What are the First Principles of Pricing?
Why is pricing innovation hard for startups?
What are the fundamentals of Price Optimization?

Demand/Yield curve; What you're trying to figure out when you're optimizing the price you're charging your customers is "How much do I charge vs How much sales optimization do I get ?"— So you try different prices and see what the effect is

Easy version of price optimization— notice how $15 price generated highest revenue— keep in mind that $5 and $10 are lost opportunities— this is what you're going to see if you offer discount pricing or tiered pricing

What is the $1 Billion Formula?
Why are SMB (Small-Medium Businesses) markets hard to penetrate?
What is the 10-5-20 Rule? When is it useful?

<aside> ⭐ All information is owned by Y Combinator. I claim no ownership of this information.

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